Makeover of stores aids profit

Woolworths has wrung extra earnings out of its New Zealand supermarkets during a period when food prices were on the decline.

The Australian-owned group lodged documents with the Companies Office which show its local operations increased profits by 29 per cent to $128.9 million in the year ended June 24.

Earnings before interest and tax (ebit) rose 15.5 per cent to $288.5m, up from $249.9m the previous year.

Revenue was up 3.5 per cent to $5.6 billion, outpacing the cost of sales, which rose 2.5 per cent to $4.3b.

The company's earnings continue to march well ahead of food prices, which fell 1.8 per cent in the year to July, according to Statistics New Zealand data.

It has previously attributed the strong results to the significant investment in subsidiary Progressive Enterprises, which runs the Countdown chain.

The last of the Woolworths stores underwent a makeover to the budget-friendly Countdown brand at the end of 2011.

Countdown has already reported sales of $1.5b in the first quarter of the new financial year, up 2.7 per cent on the same period the previous year.

It has also announced plans to place pharmacies in selected supermarkets as an extension of the health and beauty product ranges.

In the year to June, Woolworths New Zealand employees were paid a collective $547m including benefits and KiwiSaver contributions, up 5 per cent from the previous year's $519m. Fairfax NZ

Taranaki Daily News